The pioneering legal tech implementation platform Reynen Court has entered an extremely difficult time, with its recent ‘crowdfunding’ project cancelled and staff reporting major job cuts. One axed staff member told this site: ‘90% of staff were let go on Friday (Nov 18th).’
Artificial Lawyer asked founder and CEO, Andrew Klein, for an update on the situation.
He explained: ‘The actual number [of departures] depends on a number of factors and the outcome of discussions taking place with investors. So too early to report.’
He added that although they have halted the new funding plan – which was created to stave off the need for a difficult and probably ‘down round’ series B funding – that the company, which has had funding from Clifford Chance and Latham & Watkins, was still going.
‘We were pleased with the reception to our stock offering. However, we recently made the decision to pull the transaction after realizing that market conditions were making it unlikely that we could meet the forecast on which the offering was based. It simply became untenable to close on the committed capital in the current economic environment.
‘As a result of the delay in raising capital, we are reducing headcount and other operating expenses to manage through the economic downturn.
‘We are of course in contact with all of our customers. Today we also informed our vendors that they might experience delays in service or support. We are not closing down,’ he told this site.
The move comes just a week or so after Artificial Lawyer was told by several market insiders that they believed Reynen Court’s raison d’etre had passed. They said that when the market was once filled with new startups, and issues such as security were a big challenge, then the platform, which uses Kubernetes, made a lot of sense. But now, they said, most startups and scaleups have got wise to what law firms want and there is no need for an intermediary platform.
That said, Klein, as noted above, insisted that the platform will continue. Also, by cutting staff it has a chance to extend its cash ‘runway’. However, given the coming recession, how long can it go on for?
The company has also sent this email to customers: ‘I am sorry to report that Reynen Court is reducing our headcount and other operating expenses in order to manage through the economic downturn.
‘Consequently, until further notice, we are suspending access to our vendor portal. You may also experience delays in certain vendor services and support.
We greatly value your partnership and thank you in advance for your patience.’
This site has to say that it was a great idea and managed by a tremendous group of people, but perhaps the market view is right? We will see. Good luck to everyone involved.
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